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A project has the following estimated data: Price = $40 per unit; variable costs = $28 per unit; fixed costs = $14,500; required return =
| A project has the following estimated data: Price = $40 per unit; variable costs = $28 per unit; fixed costs = $14,500; required return = 8 percent; initial investment = $24,000; life = four years. |
| a. | Ignoring the effect of taxes, what is the accounting break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| b. | What is the cash break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| c. | What is the financial break-even quantity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| d. | What is the degree of operating leverage at the financial break-even level of output? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) |
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